Friday, October 16, 2009

Reliance Communications : Satyam plus ?

Reliance Communications Ltd was recently subjected to a special audit by Dept. of Telecommunications. Other telecom companies also were specially audited. Special audit of RCom has resulted in a lot of fireworks and histrionics. The audit is supposed to have unearthed over-reporting of revenue by Rs.3000o million and underpayment of license fee by Rs.3000 million. The report is not yet officially released, but Mr.Anil Ambani's fulminations and barrage of invectives suggest that the report indeed contains such findings.Mr.Ambani has contested the findings saying they were not discussed by the auditor with the company. The auditors (Parekh & Co) have confirmed that they had duly discussed with the company. Either the company or the auditor is economical with the truth. If the alleged findings are true, the company has outdone even Satyam. Satyam overstated revenues but did not evade any payment to the government. In the interest of governance and fairplay, DoT should release the special audit report in the public domain forthwith.